Rare Earth Elements: Three Ways to Profit from Mining Crucial Precious Metals
by David Fessler, Energy and Infrastructure Expert Tuesday, October 20, 2009: Issue #1119 –Investment U

What do your cell phone, a Euro banknote, superconductors, fiber-optic communications systems and the motor for your car’s windshield wiper all have in common? They (and thousands of other everyday products) contain minute quantities of some of the most obscure chemical elements on the planet. They are known as “rare earth metals” or simply “rare earths.” What is the big deal about them? Simply put, trillions of dollars of modern devices would not be possible without their existence. These “rare earths” are critical elements in many industrial processes. the United States Geological Survey has
identified 17 of them. Let’s take a quick look at “rare earths” to get an idea of just how pervasive and critically important they are and, of course, how to do something that very few other investors even consider, profit from them… Little-Known, Rare Earths… Critical to Everyday Life The term “rare earths” comes from the fact that the minerals that contain these unusual elements were quite rare when first found in Ytterby, Sweden. Occupying slots 21, 39 and 57-71 in the periodic table of the elements, here are a few of the most commonly used “rare earths”…
• Cerium is the most abundant of the “rare earths.” It is found in automobile catalytic converters and other pollutioncontrol equipment. It also helps to reduce sulphur oxide emissions, and is added to diesel fuel to help it burn better.
• Neodymium is used in magnets to make the magnetic field incredibly strong. Cell phones, computers and audio speakers would not exist without neodymium magnets. In addition, miniature motors would not be possible at all without it.
• Holmium has the greatest magnetic strength of any element, and is used in medical and dental lasers and nuclear control rods. It is also a colorant for glass.
• Dysprosium’s magnetic strength properties make it a useful material for certain lasers, fuel injectors for diesel engines, compact discs, and other various data storage applications.
• Thulium is one of the rarest and most expensive of the “rare earth” metals. It has unique properties that make it ideal for laser-based surgical tools.
• Yttrium is primarily utilized to make red phosphors for use in red LEDs and superconductors.
• Europium is a key ingredient in certain types of lasers and is a part of the chemical process to screen for Down’s Syndrome.
• Erbium is a silvery white metal created for use in photographic filters, and as a coloring agent in cheap sunglasses and jewellery. It’s also a key element in optical amplifiers widely used in fiber-optic communications systems.

Rare Earth Elements and “The China Factor”
While found in relatively high concentrations in the Earth’s crust, until 1948 most of the world’s “rare earth” supply came from sand deposits in Brazil and India. However, in the 1950s, South Africa became the primary source, with U.S. production ramping up and continuing well into the late 1980s. While there is still some residual production from those sources, China has stepped to the front of the pack. Its “rare earth” metal production dwarfs that of everyone else. As you can see on the chart, the Red Dragon is responsible for nearly 95% of the world’s “rare earth” production. Over the past decade or so, rare metal usage has increased dramatically, which has resulted in a significant strain on supplies. In fact, there is growing concern that the world may soon face a shortage that could rise to over 40,000 tons annually. With China using nearly two-thirds of what it produces, it is naturally keen to protect its own interests. The country is stockpiling its supplies and continuing to reduce annual exports of “rare earths.” The real concern is that within a few years China may decide to keep everything it produces. Because of this threat from China, the “rare earth” sector is on fire, with a worldwide flurry of “rare earth” exploration. A mine in California is set to reopen by 2012 and Australia is currently developing the richest “rare earth” deposits outside of China.

Note: Currently, there are three companies exploring potential REM deposits in the Northwest Territories, Manitoba and Saskatchewan.